Last week, I equated Canada’s pursuit of the LNG industry to the epic tale The Odyssey.

I should have called it Sleeping Beauty.

That’s because one of the front-running projects, the $36-billion Pacific NorthWest LNG development led by Malaysia’s Petronas, has been put to sleep — permanently.

It’s another proposed liquefied natural gas project that began with great expectations for Canada’s energy sector, but fizzled out.

The broader hope of building a booming LNG industry on British Columbia’s Pacific coast remains alive. But with several projects cancelled or dormant, Canada’s LNG aspiration lies in stasis, waiting to be brought back to life one day, one analyst quipped.

For Petronas and its partners, a long path led to Tuesday’s difficult decision to abandon the facility.

After more than five years of pursuing plans to build a liquefaction export terminal near Prince Rupert — and 10 months after receiving federal approval — Petronas said “prolonged depressed prices and shifts in the energy industry” triggered the project’s cancellation.

“The decision is predominantly driven by the changes of the market conditions from where we started in 2013,” Anuar Taib, chairman of Pacific NorthWest’s board, told reporters.

“Unfortunately for us, we don’t believe we have that mix of where the sweet spot can be hit. So because of that, we decided to stop the project.”

Anuar stressed several times this doesn’t mean the LNG sector in Canada is doomed, but it must clear more obstacles.

The right project will need a world-class resource base for gas, proponents with a long-term vision for LNG, competitive capital costs, willing customers and market conditions that support higher prices.

At one point, that was Pacific NorthWest LNG.

With global prices for the super-cooled natural gas dropping by more than half from their peak earlier this decade, the ground isn’t fertile for such a risky investment today.

The project’s termination is a significant setback for the Canadian energy sector, as well as various governments, First Nations and workers who would have benefited economically from it proceeding.

“It’s a wake-up call that we need to step into this space,” said Canadian Association of Petroleum Producers CEO Tim McMillan.

Canada has massive natural gas resources, production that’s forecast to climb by 18 per cent by the end of next decade, and 24 LNG projects in the hopper.

Yet only one smaller venture — the $1.6-billion Woodfibre LNG venture near Squamish — has been given the green light to date.

For domestic gas producers facing stiff competition for their traditional customers in the United States, LNG has been viewed as a promising opportunity. It would provide Canadians with the ability to ship product into Asian markets such as India, China, Japan and South Korea.

McMillan noted global gas consumption is expected to increase by about 50 per cent by 2040 and, according to the International Energy Agency, become the fastest-growing source of energy.

Yet while Canada has dithered, debated the merits of building LNG plants and conducted lengthy reviews of several proposals, the United States has been busy building.

It now exports product from the Sabine Pass terminal in Louisiana. Another five U.S. projects are under construction with production capacity of seven billion cubic feet per day.

“The U.S. has leapfrogged us,” said McMillan. “We have an opportunity here, but one we can’t take for granted.”

Global LNG markets are working through a supply glut as new plants come on line, although several analysts believe they will return to balance by the middle of next decade.

Canadian projects still on the drawing board will need to be ready — with regulatory approvals, government backing and willing investors — whenever the next window of opportunity opens.

“It’s a setback … but I don’t think it’s the death knell for LNG,” said Ian Archer, associate director of North American natural gas for energy consultancy IHS Markit.

“In some cases, it could be an opportunity. You’ve had someone step away from the table. Is there a chance for someone else to sit there and play a hand?”

Let’s hope that’s the case.

If there is any silver lining in Tuesday’s announcement, it’s news that Petronas hasn’t given up on Canada.

Malaysia’s state-owned oil and gas company made a big splash in June 2012 by agreeing to buy Calgary-based Progress Energy Resources Corp. for $6 billion.

At the time, Progress CEO Michael Culbert said the two companies expected first shipment of liquefied natural gas from a new Prince Rupert export terminal would occur by 2018.

Since then, the company and its partners have spent up to $2 billion a year exploring and producing gas from its resource base, particularly from the Montney shale assets in northeast British Columbia.

Anuar, executive vice-president of upstream for Petronas, said the company will relocate its unconventional gas centre of excellence to Calgary from Kuala Lumpur, bringing technical experts together in one place.

“For Petronas, we’re positioning Progress Energy to be one of top exporters in North America,” he added.

But as the executive later noted: “For us, the Pacific NorthWest LNG venture has ended.”

For Canada, the idea of becoming a global player in the LNG game is back in limbo.

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